Question 1

Turner, Inc., provides group term life insurance to the officers of the corporation only. Janet, a vice-president, received $450,000 of coverage for the year at a cost to Turner, Inc. of $5,600. The Uniform Premiums (based on Janet's age)  are $15 a year for $1,000 protection. How much of this must Janet include in gross income this year?

Accepted Answer

A)   $0.
B)   $2,700.
C)   $5,600.
D)   $6,000.
E)   None of the above.F) D) and E)
G) A) and E)

Question 2

The B & W Partnership earned taxable income of $140,000 for the year. Bryan is entitled to 50% of the profits, but Bryan withdrew only $60,000 during the year. Bryan's gross income from the partnership for the year is $60,000.

Accepted Answer

A) True 
 B)False

Question 3

Katherine is 60 years old and is bargaining with her employer over deferred compensation. In exchange for reducing her current year's salary by $50,000, she can receive a lump­sum amount in 5 years, when she will retire. If she receives the $50,000 in the current year, she will invest in certificates of deposit that yield 5%. Katherine is in the 28% marginal tax bracket in all relevant years. What is the minimum amount Katherine should accept as a deferred pay option? [Hint: the compound interest factor is 1.1934.]

Accepted Answer

$59,669 The $50,000 salary will be $36,0...

Question 4

Nicholas owned stock that decreased in value by $20,000 during the year, but he did not sell the stock. He earned $45,000 salary, but received only $34,000 because $11,000 in taxes were withheld. Nicholas saved $10,000 of his salary and used the remainder for personal living expenses. Nicholas's economic income for the year exceeded his gross income for tax purposes.

Accepted Answer

A) True 
 B)False

Exam 4: Gross Income: Concepts and Inclusions

Correct Answer
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The B & W Partnership earned taxable income of $140,000 for the year. Bryan is entitled to 50% of the profits, but Bryan withdrew only $60,000 during the year. Bryan's gross income from the partnership for the year is $60,000.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$59,669 The $50,000 salary will be $36,0...
View Answer

Exam 4: Gross Income: Concepts and Inclusions

Correct AnswerverifiedShow Answer

The B & W Partnership earned taxable income of $140,000 for the year. Bryan is entitled to 50% of the profits, but Bryan withdrew only $60,000 during the year. Bryan's gross income from the partnership for the year is $60,000.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answerverified$59,669 The $50,000 salary will be $36,0...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$59,669 The $50,000 salary will be $36,0...
View Answer